Your main competitors are lowering the price of their product – what strategy do you adopt? Do you reduce your cost, do you not respond, or do you start your promotion?
A marketing strategy’s primary task is to differentiate your product to meet customer needs best and gives you an advantage over your competitors.
These are the questions we answer when constructing a marketing strategy:
– Step 1 – where do we operate: analysis of the market and its segments.
– Step 2 – to whom we sell: that is the target segment and its needs.
– Step 3 – competition: analysis of how others respond to the needs of the target group.
– Step 4 – determining what our offer is, what makes it different, and how much we sell it for.
Analysis – the basis of strategy
Example: Let’s say you have decided to start a clothing company. What do you do first? You begin by analyzing the market. You look at what sells, what is currently in demand, and what the customer segments are. Then you think about who to target – a niche or a mass customer?
Entering the segment of affluent customers allows you to set higher prices and margins but requires more significant investment in marketing and image building at the start. On the other hand, entering the mass customer segment is based on high volume with lower prices and margins – it also requires further distribution and promotion channels.
The decision also depends on what resources you have at your disposal at the beginning, what sales potential you see in a given segment, what the barriers to entry are in this segment, and how intense the competition is.
Let’s assume that you want to compete for the premium customer segment. The next step is to precisely determine their needs and expectations, including what the competition has to offer.
Why should you analyze this? So that you can offer something new and different. Something that better meets customer expectations. Obvious? Why then do companies so rarely succeed in successfully differentiating themselves? Certainly not because they spend enough time on this step.
Set a budget
Financial issues need to be analyzed right from the start. Even if you aren’t investing in relatively expensive marketing tools like Google Ads, Facebook ads, etc., you still need to consider allocating your funds. Remember also that in most cases, you will not be able to afford to stop advertising. Some companies get to the point where customers come to them practically all the time, but this is usually since they have already established a strong market position through high-quality services and useful advertising.
Therefore, consider very carefully how much money you want to spend on advertising on an ongoing basis so that you do not end up with a minus.
Identify your target group
Creating a brief but concise image of your target customers is a crucial step. You can describe them in terms of factors such as age, gender, income, location, or even lifestyle.
Remember also that you need to take a slightly different approach for strategies aimed at acquiring business customers. In this case, you will need to identify not so much as specific individuals, although this is also important as they are ultimately making decisions in companies. It will also be essential to profile the companies themselves regarding their size, revenues, structure (and therefore decision-makers), needs, etc.
Remember not to fall into the trap of wanting to reach everyone because then you won’t get anyone.
Look at the competition
No business exists in a vacuum, even if its scope is limited to a very narrow niche. Assuming that you have virtually no competition (because, for example, you are introducing a very innovative product), over time, it will appear anyway.
When creating a marketing strategy, it is essential to analyze direct competition or companies that may become such competition in the future. Remember, the purpose of doing this is not to completely copy what others are doing, but rather to find out what you could be doing differently/better to stand out from the crowd continually.
At best, you may find that you know someone who operates in your or a related niche and will be willing to give you some advice. In most cases, however, you will need to do some intense research yourself.
It will be useful to establish what your competitors’ customers are saying about you for a start. Use tools such as Brand24, which allow for so-called social media monitoring. This way, you can quickly find and follow mentions of selected companies. Analyze them to find out what products and services your competitors are using. Most importantly, try to determine how they came across them. Also, identify the promotions and marketing campaigns they ran on their social channels.
A simple but effective step would be to sign up for your competitors’ mailing lists. This way, you will gain great insight into their marketing strategy. You will be up to date with their promotions, new products, or content they want to share with their target audience.
What are the benefits for a company with a marketing strategy?
Firstly, a marketing strategy provides clear information on how to position yourself concerning your competitors. Thanks to it, you know which segment of clients your offer is aimed at, you know the needs of this segment, and you respond to them differently (read: better) way.
Secondly, a marketing strategy provides consistent guidelines for all activities in the so-called 4Ps, i.e., from shaping the product itself and its price to promotional and sales activities. Thanks to a marketing strategy, you know what to say about the product, what arguments to use, and which channels to choose to reach customers.
Thirdly, returning to the question posed initially, you know how to react to new movements of the market and competition thanks to a strategy.
A good marketing strategy is an investment in the future of the company.
Don’t confuse the goal with the strategy
When working on a marketing strategy, it is worth remembering not to confuse the goal with the means. A common mistake is to define design as business goals. Meanwhile, a process does not answer how much we will earn in the following years, but how we will reach this goal. A good strategy shows how to achieve objectives with the optimum use of available resources. Companies that do not have a process often take a much longer, and consequently more costly, the route to achieving the goals they have set.
Examples of marketing objectives:
- Increasing website traffic
- Get new followers on social media.
- Grow your email list
- Improve conversion rates
- Increase engagement on your website or social media
- Increase the number of clicks on paid ads
A good marketing strategy, then, is a company’s investment in knowledge that allows you to focus on what works best for your organization and reduce costs as a result. So is it worth investing time and energy in? Well, if higher profits and lower costs are essential to your business – start today.