Create your marketing strategy
Decide how to market your product or service to potential customers by developing a marketing strategy that positions your product to particular customers
Developing a marketing strategy is vital for any business. Without one, your business won't be able to reach the ideal customers for its goods or services.
The focus of your strategy should be to communicate the benefits of your products and services and how they can meet your customers' needs. This can then help you develop a long-term and profitable relationship with them.
You will also need to create a flexible strategy that can respond to changes in customer perceptions and demand. It may also help you identify whole new markets that you can successfully target.
Key elements of a successful marketing strategy
The questions you should ask yourself before drawing up or reviewing your marketing strategy including customer segmentation, targeting and promotion
There are several elements to consider when you are developing your marketing strategy.
Your existing and potential customers fall into particular groups or segments, characterised by their 'needs'. Identifying these groups and their needs through market research and market reports, and then addressing those needs more successfully than your competitors, should be one of the key elements of your marketing strategy.
Targeting and positioning
You should aim to sell to the market segments that will be most profitable for your business. It is important that your product offering meets the needs of your chosen target market. See target your most profitable customers and define your target market.
You should create a marketing strategy that makes the most of your strengths and matches them to the needs of the customers you want to target. For example, if a particular group of customers is looking for quality first and foremost, then any marketing activity aimed at them should draw attention to the high quality of your products or service.
Once you have created your marketing strategy, you must then decide which marketing activity or activities will ensure your target market know about the products or services you offer, and why they meet their needs.
There are many ways to achieve this - such as various forms of advertising, exhibitions, public relations, digital marketing and an effective 'point of sale' strategy. Try to limit your activities to those methods you think will work best with your target market, to avoid spreading your budget too thinly.
Monitoring and evaluation
Monitoring and evaluating how effective your strategy has been is a key element, yet often overlooked. This control element not only helps you see how your strategy is performing in practice, it can also help inform your future marketing strategy.
A simple approach is to ask each new customer how they heard about your business. Deeper analysis can come from questionnaires, focus groups and examining customers' online behaviour.
Once you have decided on your marketing strategy, draw up a marketing plan that sets out how you intend to execute that strategy and evaluate its success. The plan should be constantly reviewed and, if necessary, updated so you can respond quickly to changes in customer needs and attitudes in your industry and in the broader economic climate. Read more about how to write a marketing plan.
Define your target market
Identify your target market and work out how your product benefits that market as part of your marketing strategy in order to sell effectively and profitably
When creating your marketing strategy, you need to understand your target market - ie the specific group of consumers you will be aiming your products or services at. These are the customers who are most likely to buy from you, and who will make your business successful.
When trying to define your target market, you should consider who will be most likely to buy your products or services. Consider aiming your strategy at certain target markets, such as:
- females or males
- age groups
- regional areas
- education or interests
- average incomes
You should also consider how different groups of potential customer might use your product or service. For example, older customers might have different wants and needs to younger customers. Therefore, you might have several target markets to focus on.
Understand your product or service
You can only identify your target market if you fully understand your product's benefits and features. You should consider the following points when assessing your product:
- What is the purpose of your product - is it to solve problems, satisfy basic needs, or simply a luxury item?
- Advantages your product has over other competitors'.
- Customer problems that your product or service can solve - if applicable.
Identifying your customer
It is equally important that you establish who your product or service is aimed at. Your marketing strategy will fail if you target the wrong audience from the start, regardless of how good it is.
You need to establish whether your target group are individual consumers or other businesses. There are often two important differences between these target groups:
- individual customers - sales to this group can be unpredictable, and customers usually have smaller budgets and specific buying preferences
- businesses - sales to this group are often more predictable and stable as there is usually a greater budget available to be used on various products
It is possible to target both types of customer, though you need to be realistic about whether your product or service is relevant for them. For example, a cleaning service may apply to both consumer groups, whereas a new clothing brand will probably only interest individuals.
Researching your potential customer base
Once you know your groups of customers, you can look to conduct further research to learn more about their specific needs. For example, older customer groups may buy different types of products to younger groups.
'Market segmentation' can be an effective tool for this. It involves splitting your customer groups into smaller segments to find the sections of your customer base that will be most profitable to your business. You can segment customers by:
- social class
- activities and interests
- attitudes and beliefs
It can help to profile groups of customers to better understand their needs and behaviours. You can examine data about customers with common demographic characteristics and look for patterns. For example you may find that new mothers prefer to order online or that students buy more discount offers.
You should also consider the factors such as the following when deciding which marketing segments to target:
- Is the segment large enough to support your marketing goals?
- Does your business have the skills and expertise to deal with the chosen segment?
- Is there growth in the segment?
By focusing on the smaller segments, you can learn a lot about them and structure your marketing campaigns accordingly.
Conducting market research can be an effective way of understanding your customer base, and help you to decide the direction of your marketing strategy. See market research and market reports.
SWOT and PEST analysis
How to identify your business' strengths and weaknesses using SWOT and PEST analyses to examine your business and the external environment
An honest and rigorous SWOT analysis - looking at your strengths, weaknesses, opportunities and threats - is a good starting point for your marketing strategy document.
Strengths could include:
- good customer service
- special product features or benefits
- specialist knowledge or skills
Weaknesses could include:
- poor cashflow or a lack of capital
- lack of an established reputation
- inefficient accounting systems
Opportunities could include:
- increased demand
- using the internet to reach new markets
- new technologies that allow you to improve product quality
Threats could include:
- new competitors
- more attractive or cheaper versions of your product or service
- new legislation increasing your costs
- a downturn in the economy, reducing overall demand
See a SWOT analysis example. Having done your analysis, you can then measure the potential effects each element may have on your marketing strategy.
Understanding the environment your business operates in is a key part of market planning, and allows you to identify the threats and opportunities associated with your area of business. A 'PEST' analysis helps you identify the main opportunities and threats in your market:
- political and legal changes - such as new regulations
- economic factors - such as interest rates, exchange rates and consumer confidence
- social factors - such as changing attitudes and lifestyles, and the ageing population
- technological factors - such as new materials and growing use of the internet
Developing your promotional strategy
How to develop your promotional strategy to reach the largest number of customers in your target market using the right mix of tactics such as advertising
When you have determined your target audience you should decide what message you are trying to get across to them in your marketing. If you have more than one target market, this message could be different depending on the potential customer. It may also be necessary to focus your marketing in different ways - read more about product strategy - positioning and differentiation.
To create a successful promotional strategy, you need to create brand awareness amongst your customers. Brand awareness relates to how well your specific product is recognised by current and potential customers. Read more about the branding: the basics.
There are a number of forms of advertising which you can use to create brand awareness within your customer groups. Methods to consider include:
- advertising: the basics - eg business directories, magazines, newspapers, billboards, radio or TV
- public relations (PR) - eg press releases, launches, events or tours
- sales-based methods - eg coupons, competitions, discounts, gift vouchers, loyalty incentives for existing customers
- direct marketing: the basics - eg sales letters, email, mail order catalogues, packaging designs or point of sales displays
- search engine optimisation and pay-per-click and paid search advertising
- social media marketing and advertising
You could also consider attending dealer or showroom events, exhibitions or trade shows. This allows you to take advantage of any sales opportunities that may present themselves there and reach your target audience.
Selling to existing customers
You may be able to increase awareness of your product or service by marketing it to your existing customers. If you understand your current customers you should be able to develop ways to target them and increase your brand awareness. You should aim to target your most profitable customers.
You should also encourage existing customers to promote you to associates, as word of mouth recommendations can be very influential when developing a brand.
Read more about how to sell more to existing customers.
Timing and measuring your campaigns
Whatever promotional strategies you use, you should time your activities to reach your target customers when they are most receptive. You should develop strategies that combine both long and short-term activities - eg special offers or competitions.
Measuring the effectiveness of your strategy is also important. This can include asking new customers how they heard about you, or using surveys before and after every marketing campaign. You could also monitor your website traffic and use individual promotional codes for specific sales or offers. These can help you determine what is and isn't working and show you where you can improve your campaigns.
Product strategy - positioning and differentiation
How to focus on your existing products or services and position them to meet your customers’ needs and distinguish them from your competitors
In order for your product or service to be successful against the competition in the marketplace and attract customers, it is important to make sure your product or service stands out. You should consider what makes your product or service different from others that exist and how this can be displayed through an identity or marketing campaign. Read more about how to understand your competitors.
Needs-based product marketing
You can use needs-based product marketing to improve on your existing products. To help position your product or service, you should focus on your existing products or services, even if you have limited cash, skills or technological resources. To do this, you should:
- define your target market
- identify the main attributes of your product or service
- collect information from customers and potential customers about how they perceive the product or service - eg how popular it is, and how valuable, useful or cost-effective it is, especially compared to similar products or services
Tailor your product to meet customer demands
You should continually look for ways to adapt and promote your products and services to match your customers' requirements. Product or service development can focus on features, design and quality and so can the customer service you provide. These will help further your position and differentiate you from your competitors.
By specifically focussing on different customer segments, you can identify ways to develop your product or service to exploit new areas and increase your profitability. For example, by offering holiday insurance to those on sport-based holidays - in addition to your standard holiday insurance schemes - you can create a new market for your service and retain your existing segments.
Product portfolio - product life cycle
How to manage product life cycles and portfolios in order to increase the success of your product from introduction through to maturation and decline
Product life cycle management is an essential part of all effective marketing strategies. If you are aware of where your product is in its life cycle, you can market it in a way that will maximise its sales.
Your marketing strategy should be tailored to each of your business' products or services, but should also take into account what stage your product is at in its life cycle. For example:
- mature products or services often suffer from increased competition as similar products and services enter the market
- as the market matures for your products or services, prices may drop or stabilise
It is a good idea to have new products or services to introduce as others decline. That way, there's always one part of your range showing a sales peak. Alternatively, you can make changes to the current product to create a new version. Read more about how to research and develop your business ideas, new products and services.
Effective research into your markets and competitors will also help you manage your product's lifecycle.
If you're a smaller business with few resources, you don't have to necessarily be the first to market. In fact, being second can result in lowered costs and risks. However, rather than concentrating on innovation, you should focus on what makes you different to - and better than - your competitors.
See product life cycle.
How to make your marketing strategy a success
Useful tips and pitfalls to avoid when drawing up your marketing strategy including focusing on the market, following up and noticing the competition
Before looking at new markets, think about how you can get the most out of your existing customers - it's usually more economical and quicker than finding new customers.
Perhaps you could sell more to your existing customers, or look at better ways to retain key customers.
Focus on the market
Take steps to find your most profitable customers:
- Analyse the different needs of different groups of customers.
- Focus on a market niche where you can be the best.
- Aim to put most of your efforts into the 20 per cent of customers who provide 80 per cent of profits.
Don't forget the follow-up
Monitoring, evaluation and review are key to success:
- Approach a third party for feedback about your strategy - they may be able to spot any gaps or weaknesses that you can't see.
- Put your marketing strategy into effect with a marketing plan that sets out the aims, actions, dates, costs, resources and effective selling programmes.
- Measure the effectiveness of what you do and be prepared to change things that aren't working.
Pitfalls to avoid
Watch out for these common mistakes:
- Making assumptions about what customers want.
- Ignoring the competition.
- Trying to compete on price alone.
- Relying on too few customers.
- Trying to grow too quickly.
- Becoming complacent about what you offer and failing to innovate.
Be sure to follow up all of your marketing and promotional strategies with a marketing plan. This sets out clear objectives and lists the actions you will take to achieve them.
Marketing new products - Genesis Advertising
Video case study explaining how Genesis Advertising market new products
Genesis Advertising is a communications agency based in Belfast. It specialises in advertising, design and consultancy.
Here, Managing Director, Stephen Bogan talks about how his company markets new products.