India has over 60 million small businesses, but shockingly, studies by RedShift Research and GoDaddy show that 63% of small businesses in India still need a marketing strategy. Not only do small businesses lack a marketing strategy, but according to a recent survey by the Confederation of Indian Industry (CII), approximately 20% of large businesses in India do not have a formal marketing strategy.
Why? The precise reason remains undefined, but some businesses may not fully recognise the value of marketing.
Please don’t say your business falls into that group. If so, let me tell you: time is running out.
You may wonder why we can’t simply proceed without a marketing strategy. Well, you can, but you shouldn’t.
Let’s understand it with the help of an example. We all are familiar with the name “Kodak”. Kodak was once a leader in the photography industry, but it failed to adapt to the rise of digital photography. As a result, Kodak’s sales decreased drastically, and the company filed for bankruptcy in 2012.
Now, the question arises: What is the role of marketing strategy in this? Well, marketing strategy plays a significant role, and an effective marketing strategy can be a game-changer for business success.
If Kodak had employed an effective marketing strategy, they would have been aware of their competitors, anticipated upcoming challenges, stayed updated on the latest technologies, understood customer demands, calculated ROI, and more. Ultimately, such a strategy might have enabled them to remain in sync with industry standards.
I hope you now know the importance of marketing strategy and planning.
Don’t Mix Up Marketing Strategy and Marketing Plans: Clarifying the Key Differences
It’s common for people to confuse marketing strategy with marketing plans, but these are two distinct concepts. Let’s break it down:
A marketing strategy is a long-term plan of action to promote a company’s products and services. Conversely, a marketing plan’s primary objective is attracting new customers and cultivating loyalty.
At first glance, they might seem similar, but the main difference is that a marketing strategy goes beyond this. It continues attracting and retaining customers; it also encompasses actions to stay ahead of the competition and achieve comprehensive business goals. It aligns with the company’s mission and long-term objectives, ensuring that products and services meet customer expectations.
Mapping Out Your Business’s Marketing Goals
Now that we’ve clarified the critical difference between marketing plans and strategies, the next step is to chart your business’s marketing goals. But how would you make marketing goals?
Here are some key points to guide you in effectively mapping out your business’s marketing goals and aligning them with your business objectives.
- Determining the Company’s Main Objective or Mission
Before setting marketing goals, profoundly understanding your organisation’s core purpose and operational processes is crucial. Having a clear idea of what you aim to achieve and the image you want to establish in the marketplace for your brand will help you align your marketing goals with your business objectives.
Always remember attempting to craft a marketing strategy without clearly understanding your business’s purpose is akin to planning a journey without knowing your destination.
- Set SMART Goals
Each marketing goal should be SMART. This means they should be Specific (clear and well-defined), Measurable (quantifiable), Achievable (realistic), Relevant (aligned with your business and industry), and Time-Bound (have a deadline).
- Who is Your Ideal Customer?
Define your target audience clearly, considering demographics, psychographics, and buying behaviours.
- Budget Allocation
As a business owner, you better understand how much profit you are gaining and what percentage of the overall profit you should spend on marketing. Your budget will affect what strategies and tactics you can implement.
- Select Marketing Channels
Decide on the marketing channels you will employ to reach your target audience. These options encompass digital marketing (such as social media, content marketing, email marketing, and PPC advertising), traditional marketing (including print, TV, and radio), or a strategic combination of both. Choose the channels that align most effectively with your budget and resonate with your audience.
Crafting an Effective Marketing Strategy: A Step-by-Step Guide
An effective marketing strategy is a well-thought-out plan to promote a product or service and achieve specific business goals.
Once you have grasped the core objectives of your business, you’re ready to develop a robust plan or winning marketing strategy.
This process can appear daunting and exhausting for many business owners, especially those new to strategy formulation.
To provide guidance and a more precise roadmap, we have segmented these fundamental marketing strategies into two distinct parts, each designed to facilitate your journey in building a successful marketing strategy.
Strategies to Gain a Competitive Advantage
Do you aim to outperform your competitors and set your business apart consistently? If so, you should implement strategies that will enable you to gain a competitive advantage.
What is a Competitive Advantage, and How Can It Benefit Your Business?
A competitive advantage can transform your business by setting you apart from rivals and positioning you as the preferred choice for customers.
Consider the example of a small local bakery. While several bakeries are in the area, this one stands out using locally sourced, organic ingredients, offering unique flavour combinations, and providing exceptional customer service. These factors give them a competitive advantage. As a result, they attract regular customers and charge premium prices. In this way, a competitive advantage can lead to increased customer loyalty, higher profitability, and long-term success for your business.
The primary objective of devising a marketing strategy is to secure a competitive edge and position your business ahead of the competition.
To achieve this, a critical step is to analyse your competitors thoroughly and evaluate their products and services.
Analyse 4Ps of Marketing: Product, Price, Place, and Promotion
To comprehensively understand your competitors, employ a straightforward 4Ps analysis for competing products or services. It is a framework for organising and planning a marketing strategy for a product or service.
Here’s a breakdown of what you must consider:
Product: Define the features and benefits of competing products. Determine what unique features or qualities your product should offer that competitors do not provide.
Price: Analyze the pricing strategies of competing products. Understand customer expectations regarding pricing, quality assurances, seasonal discounts, production costs, and other pricing-related factors.
Place: Identify the locations, both online and offline, where customers can discover and purchase the product. Understand the various marketing channels and distribution methods employed by competitors.
Promotion: Recognize that effective communication with customers is pivotal. Concentrate on advertising strategies, building connections with customers, and presenting your product in a way that addresses the same aspects as competing products.
By conducting a thorough 4Ps analysis, you can assess the strengths and weaknesses of your competitors, enabling you to develop a marketing strategy that positions your business advantageously in the marketplace. This strategic approach ensures that your product or service meets and exceeds customer expectations, setting the stage for business growth and success.
SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats
SWOT Analysis is a fundamental technique for assessing your business’s strengths, weaknesses, opportunities, and threats. It comprehensively explains internal factors (strengths and weaknesses within your company) and external factors (opportunities and threats in your business environment). It allows you to identify your unique competitive advantages and develop strategies capitalising on them.
Let’s delve into the critical components of a SWOT analysis.
Strengths: What are your company’s unique strengths? What are the things that you’re extremely good at? What do your customers love about you? Once you identify your strengths, you can develop strategies that highlight your strengths and make you shine in the market.
Weaknesses: What are your company’s major weaknesses? What are the areas that you need to improve? Weaknesses denote aspects of your business that undermine its market position. Once you identify your weaknesses, you can develop strategies that keep you ahead of the competition curve and address your weaknesses.
Opportunities: Simply ask, what trends can you capitalise on? What are the emerging technologies that you have mastered? When you analyse a lot of data, you get an idea of where the market is growing. You can also gain insights into where your competitors stand.
This enables you to strategise on surpassing them, optimising your sales, and identifying market segments with high or low competition. Opportunities also include emerging demands that your products or services can fulfil. If you locate a particular demand, you can make strategies to fulfil that and gain a competitive advantage.
Threats: Threats encompass external factors that have the potential to impact your business negatively. These may involve frequent shifts in customer preferences, the emergence of disruptive forces in your industry, and external factors like changes in legal policies and government regulations that affect your business operations.
Incorporating SWOT analysis into your business strategy allows you to assess your current position, make informed decisions, and develop strategies to leverage strengths, address weaknesses, capitalise on opportunities, and mitigate threats. It’s a valuable tool for strategic planning and business development.
Strategies to ensure growth
An effective marketing plan will enable you to expand your business in various ways and secure a high return on investment (ROI). Once you understand your competitors, the next step is to take actions that ensure growth. You must determine how you want your company to grow in the long term. This is where growth strategies come into play.
Growth strategies, or product-market strategies, aim to increase your market share and attract more customers to invest in your products or services.
Ansoff Matrix: The Growth Tool
When it comes to growth strategies, the name immediately comes to mind is the Ansoff Matrix- a well-known tool developed by “Ansoff” that many companies use to build their marketing strategies for growth. Ansoff identified four crucial strategies- Marketing Penetration, Product Development, Market Development, and Diversification. Here’s a brief explanation of each.
Market Penetration: Market penetration is also defined as the expansion strategy- which means to grow the distribution of existing products across existing markets. In simple terms, marketing penetration includes the following methods:
- Competitive prices to appeal to a larger audience
- Boost up promotion and distribution tactics
- Acquiring a competitor within the same niche.
Product Development: This method includes introducing new products or services in an existing market. Product development strategies can be divided into four main types:
- Investment in R&D
- Develop products that meet emerging market needs
- Purchase a new technology or brand.
Market Development: Market development focuses on expanding into new markets or customer segments while selling existing products or services. This method involves-
- Entering new geographical regions
- Targeting different demographics
- Finding new applications for existing offerings.
It’s a way to grow the business by reaching new customers.
Diversification: Diversification is the most ambitious and riskiest strategy. It involves entering new markets or industries with products or services unrelated to the company’s offerings. This strategy is often pursued to reduce risk by not relying solely on one market or product. It can lead to horizontal diversification (related industries) and vertical diversification (new stages in the value chain).
STP Marketing Model
STP stands for Segmenting, Targeting, and Positioning. It is another marketing model that many companies use to reinforce growth. These are critical steps in developing and implementing a marketing strategy to effectively reach and connect with a specific audience. Here’s what each element of the STP framework involves:
Segmentation: Segmentation involves dividing the audience into distinct groups or segments based on shared characteristics or needs. These characteristics can include demographics (age, gender, income), psychographics (lifestyle, values), behaviour (buying habits, product usage), or geographic location. The goal is to identify and understand different customer segments within the market.
Targeting: After segmenting the market, targeting involves selecting one or more specific segments to focus your marketing efforts on.
Targeting helps you prioritise and allocate resources effectively to reach the most promising and receptive customers within the identified segments.
Positioning: Positioning refers to how you want your product or brand to be perceived by your target audience within the chosen segments. It involves crafting a unique value proposition that differentiates your offering from competitors and resonates with the needs and preferences of your target customers. Effective positioning helps create a favourable and memorable brand image.
For better insights, let’s take the example of Dollar Shave Club. Dollar Shave Club segmented the personal care market by gender, age, and shaving habits. They targeted young men looking for a convenient and affordable way to shave. Within a few days, Dollar Shave Club positioned itself as a leading subscription razor provider, selling excellent razors for much less than traditional razors.
While there are myriad approaches to business growth, it’s essential to recognise that an effective marketing strategy acts as the fuel that propels your business forward, ensuring sustained success in the ever-evolving marketplace.
If you need assistance developing or exceeding an effective marketing strategy for your business, consider consulting with marketing professionals or agencies like Get Marketed. They can provide valuable guidance and expertise to help you achieve your marketing goals.
Also, remember that a successful marketing strategy is not a one-size-fits-all approach. You must tailor your marketing strategy to your business, target audience, and industry.