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A major determinant in a product's long-term success is a solid marketing strategy. Unfortunately, in a rush to get a new product to market, many companies don't invest the time and planning necessary to get a solid strategy in place that can help ensure the product's success. This article will help address how companies can craft a winning marketing strategy for any product.
There are six independent variables (keys) that help determine the most cost-effective strategies for any business. Before you jump to a "solution," it's a good idea to spend a few minutes to ensure that you have thoroughly analyzed your situation and understand each of the variables as they relate to your company and its objectives situation. Think of it as a mini situation analysis.
If you do a careful job in this review, you'll minimize the chances that you will spend hours—and a chunk of your marketing budget—implementing a flawed strategy.
1. Objective
The most important planning step is to be clear about what it is you want to accomplish. Is your goal to generate qualified leads? If so, how many and in what timeframe, and what is the value of the leads? Do you want to position your company so that it will be top of mind when new prospects are ready to buy? If so, what is it that you want them to remember about you? What is the "trigger" that will evoke your company name? What is the timeframe? And how will you know if you've accomplished the objective?
Your objective is the starting point and foundation of your marketing strategy. Take the time to make sure that you are starting out on the right foot. Don't sell yourself short at the start: Invest the time necessary to clearly spell out exactly what you want to accomplish.
Key action point: As with any business objective, it is important to be clear. An objective should be specific and measurable, with a timeframe and unambiguous success determinants that won't change or become arbitrary in a few months.
2. Industry/Sector/Category
Be clear about your target audience and competitive set. Most likely you compete with other companies that market what you market, but you probably also compete with some not-in-kind solutions and perhaps a do-it-yourself or status-quo solution. The right promotion for reaching a customer with a not-in-kind incumbent may be quite different from the one you would use when there is a directly competitive solution.
Take the time to do a SWOT (strengths, weaknesses, opportunities, and threats) analysis for your industry and sector. It will help you see where opportunities for growth lie, as well as what areas you need to protect against.
As with your objective, make sure that you invest the time necessary to understand the environment into which you are about to launch a product.
Key action point: Focus your marketing plans on the narrowest possible industry segment. It is always more cost-effective to do a great job of marketing to a niche audience than a mediocre job of marketing to a broad one. If you have multiple industry sectors in your target audience, consider splitting them into narrower slices and marketing to each with the most appropriate approach. Your marketing success increases when you pursue a more specific audience.
3. Target Audience
Within your industry segment, it is important to understand your specific target audience. Who are the decision-makers? What are their most important needs and considerations? Where do they typically learn about brands and options in your category? Are they actively seeking product alternatives, or are they loyal to an incumbent? How frequently do they purchase?
Once you understand who you are selling to and what their wants and needs are, you can tailor your marketing efforts to appeal to this group. Again, taking the time to do the necessary research is vital. If you don't have the correct target audience in mind, rushing to market can cause numerous problems later.
Key action point: Often, a simple market-research survey—even a one-on-one interview to gather information—can help you plan the marketing effort so it is on target with your objectives. This approach helps improve marketing effectiveness and efficiency.
4. Geography
Many companies attempt to serve clients across a broad geographical span, even when they have an ample pool of prospects in their immediate vicinity. It's almost always an advantage to concentrate your efforts (and budget) in a limited geography before expanding to a wider market. Such an approach lets you test and refine your strategy at lower cost and helps you better understand your customer base.
Moreover, some marketing approaches work better in certain areas than others. Having a strategy that is exactly right on average could produce one that is exactly wrong in most places.
Key action point: Focus. Don't try to be all things to all people; concentrate on a specific area with the mindset that you can expand later if the market forces dictate. Also, it is often easier to spot and correct early marketing mistakes when your efforts are aimed at a smaller geographic area. Consider that different people in different areas have different wants and needs, while you may have local resources in place that are superior to those in other areas. Make sure that expansion is dictated by available resources and knowledge, not by a desire to spread before you are ready.
5. Position on the Product Life Cycle
Be sensitive to where your product (or company) falls on the lifecycle continuum, so that you approach the marketing decision in a context that will be most relevant to your target audience.
A good starting point might be to use this portfolio-management matrix created by the Boston Consulting Group:
The horizontal axis is relative market share: This serves as a measure of strength in the market. The vertical axis is market growth rate—This provides a measure of market attractiveness.
The four quadrants delineate four types of products/businesses:
- Stars are high-growth businesses or products competing in markets in which they are relatively strong compared with the competition. They often need heavy investment to sustain their growth. Eventually, their growth will slow and, assuming they maintain their relative market share, they become "cash cows."
- Cash cows are low-growth businesses or products with a relatively high market share. These are mature, successful businesses with relatively little need for investment. They need to be managed for continued profit—so that they continue to generate the strong cash flows that the company needs for its "stars."
- Question marks are businesses or products with low market share but operate in higher-growth markets. This suggests that they have potential but may require a substantial investment to grow market share at the expense of more powerful competitors. Management has to think hard about "question marks"—which ones should they invest in? Which ones should they allow to fail or shrink? (This quadrant is often referred to as "problem children."
- Dogs, not surprisingly, refers to businesses or products that have low relative share in unattractive, low-growth markets. Dogs may generate enough cash to break even, but they are rarely, if ever, worth investing in.
Key action point: Determine which quadrant best describes your product. If you have more than one product, place each in its appropriate quadrant and promote them separately. This makes your efforts more targeted, more effective, and ultimately more cost-efficient.
6. Time and Expertise Available to Manage
Some marketing tools are inexpensive but can be extremely time-consuming to manage. Others can be outsourced or "put on autopilot" yet can be very expensive.
As you consider your needs, objectives, and budget, identify how much time and energy you have, how important the project is, and whether you have the necessary expertise to do a good job. If you spend a week learning the ropes before implementation, you want to be sure that the time investment generates a payoff for your company and that you feel confident the time invested provides the expertise you need.
Key action point: It is often a cost-effective strategy to use outside experts to plan and implement a marketing effort the first time, and perhaps the second time, while you watch over their shoulder. Doing so lets you learn from them, and you can take over later when the specific approach has proven successful. If the strategy is not a big winner, at least you won't have spent a lot of your time reading books, listening to seminars, and experimenting with an unfamiliar tool.
Lessons Learned
Take the time to invest the time and money necessary to create and develop a solid marketing strategy for your product. Think of the marketing strategy as the foundation, if the strategy isn't solid, it won't be able to support the product after launch. Be careful not to skimp on your strategy in a rush to get the product to market. Corners cut at the initial phases will come back to bite you later down the road. Doing your homework upfront will give your new product a serious advantage and the winning marketing strategy it will need to be a success!
Note: This article was excerpted by Mack Collier from MarketingProfs How-To Guide "Your Template for Creating Cost-Effective Marketing Strategies," authored by Michael Goodman.
