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Marketing Strategy

 

Selecting a marketing strategy is a process:

 

A) Examine Past and Current Marketing Strategies

Has your strategy been "business as usual," "get whatever pieces of business we can," or "follow-the-leader"? These are three common and ineffective strategies. Few small-business owners plan to run their businesses in these ways, but inattention and habit make such choices inevitable.

You can't change strategies overnight. They are built into the culture of your business. Your methods of achieving those goals (including business practices and relationships among people within the business) are inextricably mixed up with your strategic choices. The strategies and culture evolve together slowly; they change slowly too.
Strategies can be active or passive, aggressive or defensive, goal-oriented or opportunistic. Your strategies should reflect your attitudes and personality.

B) Summarize Personal and Business Objectives

Include your personal goals in your marketing plans. If you want to retire in five years, fine. Plan for it. If you want to work until you drop, fine. Plan for that. If you want your business to remain small enough so you can bring your dog to work, great. It can be done. Just don't set up your business to thwart yourself. If you want to see how big a business you can build, go ahead. Build the business. But not unless it makes sense to you personally.

C) Re-examine Marketing Strategies

Examine each of your strategies and ask yourself if, given your resources and competitive situation, it would help you reach your goals. You will probably want to use more than one strategy, or modify one or more to better fit your business.

D) Choose the Simplest Strategies

Choose the simplest strategies for your business. To be effective, strategies have to be communicated. Fancy strategies look great on paper, but if they present opportunities for misunderstanding, then there will be misunderstandings. The simplest strategies are the best strategies.

E) Your Final Strategic Choices

Once you've completed these four steps, you're ready to make your final strategic choices.

When selecting your marketing strategies:

  • Test them for consistency with each other. You don't want to pursue contradictory strategies. 

  • Test them for feasibility. If they require more resources than you can muster, they won't work. 

  • Test them for coherence. Do they fit your business? Do they tend toward unifying the focus of your marketing efforts? Do they form an understandable, easily communicated grand strategy? 

  • Make sure they are acceptable to your employees. If you can't generate company-wide support, the strategy will fail. This is where complicated strategies break down. If you can't communicate the strategies clearly, you have a problem.

Marketing Goals

Some plausible marketing goals for the immediate future are increased dollar or unit sales, improved market share, greater profits, entry into new markets, abandoning a current market, and adopting a new technology or product line. Maybe you want to improve your company's image, advertising, or promotional efforts. Or perhaps you want to implement a new pricing strategy or distribution process.

Be general. These goals will be reexamined and refocused in time. For now, just jot down the broad marketing goals you would like to achieve over the next year and over the next three years. 

Sales Goals

Sales and profit goals should be more precise. If you have a small number of product or service lines, break the goals down further. But even an aggregate number is helpful; you can break it down later. List each of your products or product lines. Next to each one, include its target market and sales forecast for the next year. For each product or product line, estimate what sales would be if everything goes wrong next year. Then estimate what sales would be if everything goes perfectly. Since neither case is likely, an in-between sales figure will be a more accurate forecast. This number is not an average of worst and best cases, but it is rather your considered opinion of what will happen to each product or service line over the next year.

Profit Goals

Profit goals are harder to establish. If you know what profit you traditionally make as a percentage of sales, use the sales forecast and add a bit. You don't want to set goals too low, and you will (you hope) become more profitable with more sales. Experience will correct or corroborate your hopes.

The Market

Customers and potential customers are organized into clusters or groups of similar types, this is "Market segmentation".  Each of these customer groups is motivated to buy for different reasons, and the selling message has to be modified accordingly. These are some of the ways that markets can be segmented:

Demographics

This groups customers together by such variables as age, sex, education, and income. 
Benefits

This recognizes that different people get different satisfaction from the same product or service.

Geography

These arise when customer preferences vary by location.

There are useful rules to help you decide on whether a market segment is worth trying to sell to.

  • Measurability. Can you estimate how many customers are in the segment?

  • Accessibility. Can you communicate with these customers? Just knowing they are out there somewhere is not much help.

  • Size. A segment has to have a large number of customers, although exactly what constitutes "large" will be relative to your business.

  • Open to Practical Development. Just being a large segment is not enough. The customer must have money to spend and be able to spend it.