You have too much to do with too few resources. You therefore focus on specific target markets, on your most important products or services, and on your most productive sales and marketing activities.
Introduction to Marketing Strategy
Much like the artist squinting to improve his vision, you need to see the high points and main priorities only, or the important points get lost in the details. Strategies that aren’t focused won’t work. When people have more than three or four priorities to deal with, the priorities get lost. When you have 20 strategic objectives in a plan, you won’t accomplish any.
Developing Your Strategy
When to say no
“I don’t know the secret to success, but the secret to failure is trying to please everybody.” –Bill Cosby
“Management is knowing when to say no.” –Hector Saldana
Notice how strategy fits into this general description. For example, our next diagram selects some target segments and rules out others:
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Our next example of product positioning is also a matter of focusing on certain portions of the possibilities and ruling out others:
Your Value Proposition
State your business in terms of its underlying value proposition. A value proposition defines the benefit offered, the target market group, and the relative pricing.
Some Sample Value Propositions
These examples are personal interpretations, used without permission, of the underlying value propositions.
Value Propositions and Marketing Plans
When you are comfortable with the underlying value proposition, you can use it to develop and implement a marketing plan:
1. First, understand the value proposition in all three parts: the benefit, the target customer, and the pricing.
2. Second, communicate the value proposition. Using all the means you have, from advertising, positioning, public relations, packaging, or whatever other tools you have available, communicate that value proposition to your target market.
For example, the importance of communicating a value proposition is obvious in the advertising message. However, it goes much deeper. With a retail location, the layout and design of the store are communicating a value proposition. Consider the difference between an expensive clothing boutique and a discount merchandiser. A computer retailer wanting to communicate service and reliability might have a large service counter prominently displayed. Long ago, auto dealerships learned the value of putting service representatives into white coats.
3. Third, fulfill the promise. If you’re offering greater reliability at a price premium, for example, make sure you deliver. If you’re stressing customer service, then deliver on that promise. Review all elements of the business in terms of how they affect your value proposition.
Keys to Success
The idea of keys to success is based on the need for focus. You can’t focus efforts on a few priorities unless you limit the number of priorities. In practice, lists of more than three or four priorities are usually less effective. The more the priorities (beyond three or four), the less chance of implementation.
Virtually every marketing plan has different keys to success. These are a few key factors that make the difference between success and failure. This depends on who you are and what services you offer. In a manufacturing business, for example, quality control and manufacturing resources might be keys to success for one strategy, and economy of scale for another. In another example, the keys might include low cost of assembly, or assembly technology in packaging kits. The channels of distribution are often critical to manufacturers. You might also depend on the brand or the franchise.
Think about the keys to success for your marketing plan. This is a good topic for a discussion with your management team. What elements are most important? This discussion will help you focus on priorities and improve your business plan.
Your Competitive Edge
What is your competitive edge? How is your company different from all others? In what way does it stand out? Is there sustainable value that you can maintain and develop over time?
The most classic of the competitive edges are those based on proprietary technology and protected by patents. A patent, an algorithm, even deeply entrenched know-how, can be a solid competitive edge. In services, however, the edge can be as simple as having the phone number 1 (800) SOFTWARE, which is an actual case. A successful company was built around that phone number.
Sometimes market share and brand acceptance are just as important. Know-how does not have to be protected by patent to offer a competitive edge.
For example, for years Apple Computer used its proprietary operating system as a competitive edge, while Microsoft used its market share and market dominance to overcome Apple’s earlier advantage. Several manufacturers used proprietary compression to enhance video and photographic software, looking for a competitive edge.
The competitive edge might be different for any given company, even between one company and another in the same industry. You don’t have to have a competitive edge to run a successful business – hard work, integrity, and customer satisfaction can substitute for it, to name just a few examples – but an edge will certainly give you a head start if you need to bring in new investment. Maybe it’s your customer base, as in the case with Hewlett-Packard’s traditional relationship with engineers and technicians, or it’s image and awareness, such as with Compaq. Maybe your competitive edge is quality control and consistency like that of IBM.
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