Marketing strategy is the process that can allow your business to concentrate your resources on the optimal opportunities with twin goals of increasing sales and achieving a sustainable competitive advantage. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives.
Your marketing strategy is, simply, how you are going to market your products, services or business to customers. It lays out what your objectives are and how you're going to execute them. Your marketing strategy can cover anything from a long-term vision for marketing your business to how to shift sales on one product over the next few weeks.
When you start a new business, especially a small business, you will have nightmares about two areas:
- Obtaining new business
- Continuing sales through existing customers
The answers to these problems are commonly misunderstood. Most new entrants into business will answer both the above questions with "advertising".
Effective marketing can create awareness of your business.
The problem with this answer is that advertising is only one part of many options that can be used to obtain new custom, and maintain sales from your existing customer base. To be successful in business you need to understand 'marketing'.
What is Marketing?
Marketing comprises a number of disciplines:
- Direct Mail
- Internet Web Site
- Design of Promotions
- Press Release
- Public Relations
- Selling Yourself
An example: you take a space at an exhibition to show your range of wares, as promoted on your web site to improve your public relations and sales. You had some leaflets designed and printed that advertised your goods through photography. You ask each visitor a few survey questions about industry, product and needs. At the exhibition you sought leads for a direct mail and telemarketing campaign.
Using mail shots to get the attention of customers is very common and is done via the postal system. E-mails can also be used to do the same job and can be the more cost-effective approach. Promotions such as leaflets, brochures and newsletters are often the main content for mail shots, although there are no limitations.
...mail shots can reach a large audience, cheaply
Although you must appreciate that most people will show no interest towards your mail, you can reduce this effect by targeting your audience using mailing lists. Further, not only will you be saving money targeting uninterested parties, but also you will reduce the effect of people giving your business a bad image through the continuous receiving of unwanted mail (junk mail).
Telephone calls can be used to make independent sales or can be used as a follow up procedure to mail shots. Once a customer has received and browsed your mail, they may have little or no intention to act and so a telephone call may just build up their level of interest. Telephone sales can be very annoying to most people, so again, it is important that you target your customers to avoid wasting their time and yours.
...sales can be made directly by phone...do you have someone capable of doing this?
If you are trying to make a sale over the phone, many people may never have heard about or seen your product, so you may decide to use telemarketing to draw people to your shop, office or even web site. If they are interested, you can then make appointments for them to visit so that you can offer them personal assistance and information regarding the product or service.
Printing can be used to market your business name on stationery such as letterheads, invoices, compliment slips, etc and advertising such as leaflets, brochures and posters.
Printing can be integrated into many of the areas listed in this article and so you have to acknowledge that it is an integral part of marketing. If not done properly, the quality of your designs and promotions may be affected by the poor quality of the final print.
Having your business name printed on such stationery will give your business a more professional look that customers will be attracted to. Different weights of paper (less than 100g to 400g) can be used for different purposes. For example, heavier paper can be used to print brochures that customers will be impressed by, and lighter paper can be used for extensive use such as letterheads and compliment slips (as the lighter paper is cheaper).
...use quality printing for your stationery, it will pay off
Exhibitions are excellent for people to view and experience your products or service. Being face-to-face with potential customers and suppliers is arguably the best way to promote your business as any questions or queries can be clarified with you in person: as a result, exhibitions can usually generate business leads. The added advantage of exhibitions is that they usually offer free publicity as journalists and photographers will nearly always be present.
...exhibitions can generate many fresh leads
It is a good idea to make your display as interactive as possible allowing people to handle and experience your products. The use of video is common although you should limit the length of the feature to, say, three minutes (on a continuous loop) as people do have a limited attention span.
Each year, there are hundreds of exhibitions being held all over the country and cover practically every field of business. You should therefore have no problem of finding an exhibition that suits your product or service.
...surveys and research will keep your marketing focused.
Survey / Research
Market research is one of the most important areas of marketing. Without the research, you will find yourself making wrong decisions and unnecessary spending that will eventually lead to business failure. Researching the market will help you find answers to how much you will price your product, who to sell it to and where (to name a few). It will also give you an insight into the best methods of penetrating the market and becoming competitive.
There are two main sources that you can collect information: primary data and secondary data. Primary data involves information that is unique, say, a survey, questionnaire or interview. Secondary data includes information that is already available such as reports, economic trends, market sales figures for previous years, etc.
Internet Web Site
Using a web site to market your business is useful when your product or service is of interest to customers that live outside of your local area. At this point, it is important to identify whether the web site will be used for one of three ways:
- Firstly, a glorified brochure that will act like an on-line interactive leaflet advertising your products or service.
- Secondly, an extension of the above: a leads provider that will allow you to give contact details for your business.
- Finally, for e-commerce where you will actually sell your product or service on-line. If you decide to adopt this option, then you will need to set up a Merchant Services Account so that customers can use credit card transactions on-line.
You have to appreciate that web sites are expensive to run and so it is important that you value the need for extending your business onto the Internet. Further, unless you are an expert at web design, you should consult a professional service to create the web site for you or your business image will be dragged down with the lack of quality.
When you have a web site up and running, you can buy banner advertising (different sizes available), micro button links, or referrals on other websites to help promote your business. You may even decide to issue an on-line newsletter periodically so that you can inform visitors to the site of any news, say, a change in price or the introduction of a new product.
...is your web site REALLY marketing your business?
Design and Style of Promotions
The design and style of your promotions, including those on-line, are important to determine the outcome of their success. Poor design and style will be a put-off for customers and the lack of quality will be seen as a reflection of the product/service you have to offer. It is therefore important that you use professional services to compensate for any lack of skills you have in this area.
...professional design and style can reflect the quality of your business
When designing, one of the most important aspects that get our attention is the use of color. You should use colors in your promotions that reflect the service or product that you have to offer. For example, finance services usually favor the darker colors such as purple, black, grey and blue: the brighter colors are usually more consumer orientated.
A press release can be used to deliver information about your business to the public through printed media such as newspapers and magazines. Such news may include anything you feel is newsworthy to the public such as the opening of your business, the introduction of a new product or service, an achievement, exceptional performance, etc.
...the press can deliver important news to a wide audience
You should target your intended audience by sending your press release to the relevant media concerning both field of business (finance, Internet, consumer, etc) and location (local, regional, national, global). Press releases are very hard to get published but if you are lucky enough to get your news printed, it can be an essential marketing tool.
To increase the chance of your press release being considered, it is important that it is written in a professional style that will reduce the need for further editing by the journalist (although they usually do change some things).
Public Relations (PR)
PR is all about getting a good image for your business to encourage sales by communicating with the concerning public. This public may include customers, staff, suppliers, the government and so on. PR is achieved through publicity: these two phrases are often confused but to be fair, they are closely linked. PR does not have to be expensive and it can so often be a much cheaper alternative to, say, having an advert in a magazine.
Press releases are usually the best form of gaining good PR but it can also be achieved through business exhibitions, conferences, sponsorship and also donations. Although publicity managers are more common with the larger companies, you may decide to take on this role to make sure that your business is in the spotlight when it is needed and that any public criticisms are justified with a convincing response.
...how popular are you with the public?
You should always be looking for personal development to help market your business. There are many ways to do this including further education, courses, cross training and mentoring to help build yourself to become successful: it is always good for a business to have someone that is successful, approachable and in some cases, willing.
...you can be your most powerful marketing too
Mentoring is becoming a common trend and a mentor is someone who, without full-time coaching, can give you an insight into, say, business management, production, marketing, etc at key moments in your development.
Photography is something that can be used in your visual marketing methods such as posters, leaflets, brochures, etc. Photos can also be used alongside press releases as they allow people to visualize aspects of your business whether it be the product, the premises or even yourself! Photos can often say so much about the quality of your business as it gives an appearance that is so much better than plain old text and images (although images do add quality to some respect).
...photos can increase the quality of leaflets, posters and brochures
It is important that you acknowledge the importance of the quality of the photographs as poor quality will have an opposite effect of reducing interest. As a result, if you are not experienced in the field of photography (this does not include holiday pictures!), you should consult assistance from somebody experienced, possibly a family member or friend.
When the word marketing is mentioned, most people immediately think of advertising. This is not the wrong answer but advertising form only a part of marketing: it falls in the Promotion quadrant of the marketing mix.
Arguably, all businesses need to implement advertising to some degree in order to be successful: this may be when your business is starting up and/or throughout the time you continue to trade.
There are many reasons why advertising is used and commonly it is used for creating awareness of your products / service. Recently, there has been a sudden rise in corporate advertising: trying to build the awareness of the business itself.
Advertising is done through a range of media including newspapers, magazines, leaflets, posters (in shop windows, etc) and so on… It is important that you target your audience to avoid wasting money advertising to uninterested parties.
...identify what advertising is best for your business.
There’s never been more competition than now. According to a recent study, one in four people own their own business. Talk about competition. Your next-door neighbor could end up as your fiercest rival!
The average consumer is bombarded by more than 3,000 commercial messages each day. It’s never been more difficult to rise above the noise of the thousands of commercials, direct-mail pieces and telemarketing campaigns all vying for the attention of your prospect. This is a large part of the reason most small or home-based businesses are forced to close their doors within five years.
Success doesn’t go to the company with the best products, ideas or technology. It goes to the company with the best marketing. That’s not fair, but that’s reality. Expensive, too! It costs three times more to market your business than it did a few years ago. The odds are not exactly in your favor.
To survive, your business must stand out from the crowd.
You need a marketing system that ensures a steady flow of customers eager to buy only from your company. Not just today, but several more times over the next two to five years. And you want to turn those customers into an army of salespersons, eager to refer more new customers to you.
Sound like an impossible dream?
First, let’s define marketing. For our purposes, marketing is defined as everything you do to get and keep customers. It includes advertising, sales, product fulfillment, billing and customer service.
When you make it risk-free to buy from you and tell the world about it, more people will buy.
If you forget everything else but the last sentence, that’s OK. If you follow the sentence above you will improve your business instantly.
Your aim is to eliminate all danger from the buying transaction for your customers. If you do so by removing the risk with a money-back or other strong guarantee, you make it less threatening for people to consider your offer. You lower the barriers that prevent people from doing business with you. You give them a compelling reason to buy today without fear of looking bad tomorrow.
It’s that simple.
If you guarantee your marketing you will produce new customers, repeat customers and referral customers. By removing the risk to buyers through guarantees, your business will stand out. You will make it easy and fun for people to buy from you. And your profits will dramatically increase.
Guarantees are not new. They’ve been used by successful mail-order companies for decades. Companies like L.L. Bean and the Sharper Image. They’re hugely successful now, but they were once small businesses. Perhaps smaller than yours is now. But their profits grew from a trickle into a mighty torrent because customers knew they could buy without the fear of being stuck with an item they didn’t like. Strong guarantees and quality products are an unbeatable combination.
Yet, guarantees frighten many small business owners. If you’re like most, it might only take five or six big refunds or major revisions in a year to spell financial disaster. What if your clients called their friends and all started asking for refunds at once? What if word got out around town that your business was an easy target for crooked people who could take your product and then take back their money?
But you already have a guarantee; maybe you just don’t know it.
If a customer called to complain that the work you did was unsatisfactory, what would you do? Offer to redo or replace it, probably. Because it’s a smart investment of your time and money to satisfy one current customer now than it is to combat a lot of bad word-of-mouth later.
It just makes sense.
Especially when you consider that, according to one recent study, a satisfied customer tells one person about your company. But an unsatisfied customer tells NINE people. You need to put those numbers in your favor. You need to satisfy your customers. And a guarantee makes it all possible.
There’s more. At most, only about 1-2% of your customers will ever ask for their money back if offered a refund, so guarantees are a safe, calculated risk.
How do we know?
Ask yourself the following questions:
- How many of my current customers have complained to me about my products or services in the past month?
- In the past year?
If your product or service is of acceptable quality, you should have few complaints, if any. (If you have a lot of complaints, that’s OK. Now you know where to focus your efforts!)
Marketing - Strategic Market Definition
Strategic Market Definition – This looks at the broader market that you operate in. Looking outside the current market you actually operate in allows you to take advantage of opportunities that may present themselves in allied markets that you have the ability to enter by your brand name or business operations. For example, if Coca-Cola had of defined their Strategic Market as the Cola Market they would have missed out on the great opportunities that appeared in the Bottle Water and Sports Drink Market.
Served Market Definition – This describes which segments of the Strategic Market that you are currently operating in.
- What is you Strategic Market Definition?
- What is your Served Market Definition?
- Who is your Target Market?
- What are the main characteristics and demographics of the target market?
- What are the main customer needs of the target market?
- Can this target market be further segmented and how?
- What is the average value sale of the market?
- What is the frequency of purchase in the market?
- How many potential customers are in the market?
- What is the size of the market?
The Competitor Analysis is an analysis of the business’s major competitors and anyone who could become a major threat. Most often this is best done by having a brief description on each competitor, then displaying the relevant information in a table format as displayed below.
Points to cover
- Competitors in your market
- Relative size
- Growing or declining
- Perceived threats
Start a file on each of your competitors. Keep manila envelopes of their advertising and promotional materials and their pricing strategy techniques. Review these files periodically, determining when and how often they advertise, sponsor promotions and offer sales. Study the copy used in the advertising and promotional materials, and their sales strategy. For example, is their copy short? descriptive? catchy? or how much do they reduce prices for sales? Using this technique can help you to understand your competitors better and how they operate their businesses.
Pricing and Sales
Your pricing strategy is another marketing technique you can use to improve your overall competitiveness. Get a feel for the pricing strategy your competitors are using. That way you can determine if your prices are in line with competitors in your market area and if they are in line with industry averages.
Some of the pricing strategies are:
- retail cost and pricing
- competitive position
- pricing below competition
- pricing above competition
- price lining
- multiple pricing
- service costs and pricing (for service businesses only)
- service components
- material costs
- labor costs
- overhead costs
The key to success is to have a well-planned strategy, to establish your policies and to constantly monitor prices and operating costs to ensure profits. Even in a franchise where the franchisor provides operational procedures and materials, it is a good policy to keep abreast of the changes in the marketplace because these changes can affect your competitiveness and profit margins.
One of the greatest frustrations and opportunities in marketing is change—customers change, competitors change, and even the marketing organization changes. Strategies that are highly successful today will not work tomorrow. Customers will buy products today that they will have no interest in tomorrow. These are truisms in marketing.
Although frustrating, challenges like these also make marketing extremely interesting and rewarding. Life as a marketer is never dull.
Another fact about marketing strategy is that it is inherently people-driven. Marketing strategy is about people (inside an organization) trying to find ways to deliver exceptional value by fulfilling the needs and wants of other people (customers, shareholders, business partners, society at large), as well as the needs of the organization itself. Marketing strategy draws from psychology, sociology, and economics to better understand the basic needs and motivations of these people - whether they are the organization’s customers (typically considered the most critical), its employees, or its stakeholders. In short, marketing strategy is about people serving people.
The combination of continual change and the people-driven nature of marketing makes developing and implementing marketing strategy a challenging task. A perfect strategy that is executed perfectly can still fail. This happens because there are very few rules for how to do marketing in specific situations. In other words, it is impossible to say that given ‘‘this customer need’’ and these ‘‘competitors’’ and this ‘‘level of government regulation’’ that Product A, Price B, Promotion C, and Distribution D should be used. Marketing simply doesn’t work that way. Sometimes, an organization can get lucky and be successful despite having a terrible strategy and/or execution. The lack of rules and the ever-changing economic, sociocultural, competitive, technological, and political / legal landscapes make marketing strategy a terribly fascinating subject.
MLM can no longer claim to be new and, thus, exempt from the normal rules of the market and the way goods and services are sold. They have been tried and, for the most part, have failed. Some have been miserable failures in spite of offering excellent products.
Marketing innovations are not rare in the modern world, as evidenced by the success of Wal-Mart, which found a more efficient and profitable way to distribute goods and services than the status quo, providing lasting value to stockholders, employees, distributors, and consumers. But this is not the case with any MLM to date, and after 25 years of failed attempts, it is time to point out the reasons why.
The first question is this: Is any company choosing this marketing strategy destined to fail, to degenerate into an exploitative venture, regardless of how good the product is?
To see this clearly we must go through an, otherwise, obvious and elementary discussion of how any business must be careful not to over-hire, overextend, or oversupply a market?
Any business must carefully consider supply and demand. For example, if the ReVo Corporation thinks that it will have a full-fledged fad on their ovoid sunglasses next summer, perhaps they should plan to build and distribute, say, 10M units. This involves gearing up factories, setting up distribution and dealer networks, and carefully managing the inventories at each level so that ReVo will still have credibility with their distributors, retail outlets, and the public the following year.
If it turns out that there is a "run" on ReVo products, and they sell out in mid-June, then they have miscalculated demand and will miss out on profits they could have made. The more serious problem, however, is overestimating the saturation point for the product. If they make 10M units, and sell only 2M units, this may be the end of ReVo as a company.
The all-too-obvious point here is that management of supply and demand, and keen insight into realistic market penetration and saturation are crucial to any business, for any product or service. Mismanagement of this aspect of a business will eclipse good market access, excellent product design, human resource assets, production quality, and so on. Simply stated, a failure to "hit the target" of supply and demand can ruin a company if the market is oversaturated.
Evaluating Marketing Strategies
Target Market Selection
- Single-segment concentration
- Selective specification
- Product specialization
- Market specialization
- Full market coverage
- Product itself
- Attribute positioning
- Benefit positioning
- Use/application positioning
- User positioning
- Competitor positioning
- Product category positioning
- Quality/price positioning
- New product development
- Product line
- Product life cycle decisions
- Markup pricing
- Target-return pricing
- Perceived-value pricing
- Value pricing
- Going-rate pricing
- Sealed-bid pricing
- Geographical pricing
- Price discount allowances
- Promotional pricing
- Discriminatory pricing
- Product mix pricing
- Point-of-purchase displays
- Symbols and logos
- Packaging inserts
- Sales promotion
- Public relations
- Personal selling
- Direct marketing
- Channel choice
- Market logistics
- Transportation modes/carriers
Current marketing strategies
- Relationship marketing
- Database marketing
A strong Business Plan may not guarantee success; but it could certainly prevent failure!
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