An effective marketing strategy underlines business growth, and often its very existence. From meeting the target audience's needs and helping you build brand loyalty to determining the right prices for your products and services, the right strategy maximizes your chances of making it in the business world.
Marketing Strategy Definition
A marketing strategy is a company's long-term plan of action that aims to promote its products and services and gain a competitive advantage.
Don’t confuse marketing strategy with a marketing plan, though. The main goal of a marketing plan is to attract new customers and turn them into loyal buyers. As your marketing plan should be firmly rooted in your company's value proposition, it helps you to market your products or services to consumers in a more compelling way.
Marketing Strategies vs. Marketing Plans: What's the Difference?
While marketing strategies and marketing plans both play a crucial part in your business's success, there are several important distinctions between them to keep in mind.
The main difference between the two concepts is that a marketing strategy is a long-term idea, while a marketing plan typically deals with short-term issues.
Marketing strategies tend to encompass a company's mission as a whole, including what they stand for and what they hope to achieve in the future. Meanwhile, marketing plans normally cover the various logistics of marketing campaigns, such as specific types of data and market research.
Your company's overall strategy will help inform your marketing plan, which means it's crucial to make your strategy as comprehensive as possible.
Understanding Marketing Goals and Planning
Now that you understand the basics of a marketing approach, you need to start mapping out your business's marketing goals.
First, take the time to define the following core aspects of your company:
Your company's main purpose/mission
Think of Google. The brand has always been pretty transparent in communicating the key company mission — “to organize the world's information and make it universally accessible and useful.” This is precisely what they do, and this global idea underpins every innovation and addition across the company’s products and services.
The way your company operates
This aspect can be tied to your company mission. For instance, Volvo Cars has always been known as a car brand that cares about the environment and safety. Hence, their overall business operations (think of their recent move into direct-to-consumer carsharing) are underlined by the principle of building a circular economy.
Why customers should choose your products or services
If you’ve set your mission and company operation right, you’ll be able to better define why people should choose your product over others. They may want to buy Apple products because they like to be viewed as “thinking differently”, or they might choose a Cos dress because they are environmentally conscious.
Customers today have no shortage of options when they decide to make a purchase, so businesses need to make an effort to set themselves apart from the rest of the crowd.
Once you've defined all of the above aspects of your business, you'll know what makes your company unique. Your goal now is to communicate that uniqueness to your customers so that they think of your business first.
How to Create an Effective Marketing Strategy
Once you are able to define what is understood by a marketing strategy, it's time to begin forming a powerful strategy for your business.
The beginning of the strategy-building process can be daunting for many business owners. To help take some of the guesswork out of the process, we've divided the standard marketing strategy into three different components., which should help you build an efficient strategy one step at a time.
1. Competitive Strategies
The main purpose of a marketing approach is to gain an advantage over your competitors.
As you form your company marketing strategy, be sure to think about how your business can create a competitive advantage in order to succeed.
To get some idea of your rivals, run a simple 4Ps analysis for competing products. The 4Ps framework is typically used for internal marketing strategy purposes, but you can use it to outline the key features of your competitors: product, price, place, and promotion.
Initially, you have to define:
- The features of the competing product;
- Its pricing and, thus, customer segment;
- Placement (locations — online and offline — where the product is marketed)
- Promotional tactics (marketing and advertising).
Then, see how you stack up against the competition with a quick SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis.
If you want to evaluate your product’s market stance against the competition, the SWOT framework should do, as you will analyze both the internal factors (strengths and weaknesses) and external ones (opportunities and threats).
- In Strengths, you have to name business features that give you a competitive edge.
- Weaknesses define which product/business aspects weaken your market position.
- Opportunities outline data-driven insights that show how you can boost sales, maximize profitability, and grow your market share.
- Threats show which elements can potentially hinder your business performance - from the presence of innovative game-changers to slowing economic conditions.
The Market Explorer Tool
You can also turn to the Market Explorer tool. Its Growth Quadrant will instantly reflect how your market positions stack up against the competition, showing all the key market players’ growth dynamics and current market share:
If you top up your SWOT analysis with insights from the Market Explorer tool, you will have a clear understanding of your current market positions and future outlook.
2. Growth Strategies
A successful marketing plan will enable you to expand your business in various ways. To directly support this growth, you need to determine how you want your company to grow in the long run. This is where growth strategies come in.
Growth strategies, also known as product-market strategies, aim to increase your market share and persuade more customers to invest in your products or services.
A common example is the Ansoff Matrix, a tool used by many companies to plan and develop their marketing strategies for growth.
The matrix itself looks like a grid where you place each market strategy and start your assessment:
- Market Penetration is the least risky move, and involves expanding your sales of existing products across existing markets. In this case, think of lowering prices to appeal to a larger audience base, boost your promotion and distribution tactics, or acquire one of your competitors that are operating within the same niche.
- Product Development comes with the introduction of a new product to an existing market. For taking this approach, you might need to increase your R&D investment or purchase a new technology/brand that can trigger new product development.
- Market Development triggers you to enter new markets with an existing product base. This approach involves either regional or international expansion, or entrance to a new customer segment.
- Diversification, the riskiest approach, focuses on introducing a new product to a brand-new market. Diversification can be related (think of Apple producing laptops and then starting smartphone production) or unrelated (think of global conglomerates like P&G that have both food and personal hygiene products).
STP Marketing Model
Another helpful tool you can use to reinforce your growth strategies is Segmenting, Targeting and Positioning (STP).
This audience-focused model helps you prioritize propositions and deliver marketing messages that are relevant to your target audience.
The basics of the STP model:
- Segmentation: identify the key audience characteristics that will split your audience into separate segments. This post will uncover how to go about market segmentation.
- Targeting: based on demand analysis, define which customer segments would potentially bring in higher profits, have a longer life cycle, and be more compelled by your product.
- Positioning: identify how to position your product in front of different customer segments. This value/brand proposition will inform your marketing mix, messaging, and brand development. Navigate to this post to learn how to define and implement value-based brand positioning.
Think of car brands. Each company has a unique selling point, yet they all have different offers for different audiences. Volvo is generally associated with safety, hence, they appeal to safety-conscious audiences that may want a family car (SUVs) or a luxury sedan (S90). Meanwhile, Audi, while still being a safe car brand, typically appeals to speed-conscious drivers who like to get a sports car feel while driving a city car. So, this is how essentially one product can be positioned and perceived as completely different based on the STP Marketing Model.
To further accelerate your business's growth, consider using the BCG Matrix also. By helping you determine when to invest in products and when to discontinue them, the BCG Matrix lets you optimize your products so that you can retain existing customers and attract new ones. This post reveals all the ins and outs of the BCG Matrix, as well as revealing where you can unearth all the necessary data.
3. Attitude Strategies
It isn't enough to simply plan for your company's growth. The most successful businesses also identify the method of growth, which is determined by attitude strategies.
When determining your company's method of growth, you have two main options: Growth Method Acquisition and Organic Growth.
Growth Method Acquisition involves the acquisition of one business by another business. Think of the time when Facebook acquired MSQRD. This app that had advanced visual tech for video was supposed to supercharge Facebook’s other acquisition, Snapchat. This is what Growth Method Acquisition looks like in practice.
Organic Growth, on the other hand, does not include any acquisitions. Instead, this growth method refers to an increase in sales that occurs through the company's own resources. You can trigger this kind of growth by:
- expanding your market and audience share by efficient marketing techniques;
- entering new markets (geo expansion, for instance); or
- adding new products either through horizontal line extension (diversification or expansion to other markets and/or product categories) or vertical line extension (introducing new products within the same category but with other price or quality points).
Keep in mind that there are advantages and disadvantages to both methods. No matter which type of growth you choose, it's crucial to ensure that it matches up with your company's unique goals.
Grow Your Business With a Powerful Marketing Strategy
There are numerous ways to help your business grow, but one of the most powerful tools that you can use is an effective marketing strategy. These steps can help you get started on forming a strategy that brings out the best in your company. By taking the process one step at a time, you can expand your customer base, boost your revenue and steer your business towards lasting success.