Good marketing strategy and marketing planning are crucial for business success. But many companies don't truly understand what marketing is, why marketing strategy is important, and how to do marketing planning well. This article covers seven marketing topics:
- What is marketing?
- The basic principles of marketing
- Marketing strategy
- The marketing plan
- Customer focus
- The CEO and marketing
- Direct marketing
1. What is marketing?
Marketing is the process of planning and executing the development, pricing, promotion and distribution of products and services to targeted customers. Using this definition of marketing, everyone in your organisation is ultimately involved in marketing in some way – not just some narrowly defined "marketing department".
2. The basic principles of marketing
Marketing-oriented organisations focus like a laser beam on customer needs and wants. They anticipate demand. They enlarge demand through promotions and advertising. Then they satisfy that demand.
Unfortunately, too many companies either don't understand this basic principle of marketing or lack the resolve to see their marketing strategies through to completion. In fact, many businesses start thinking about marketing campaigns only after sales have begun to sag.
Other reasons why marketing plans fail:
- No sense of the future. Successful marketing is an investment in your organisation's future. Be creative. Focus on new opportunities. Always think of new ways to enhance exposure for your product.
- No measurement of results. Like any other initiative, marketing projects must be tested and measured. To measure marketing project results, assign someone to capture sales and customer information and give them access to all revenue and expense data. Once the marketing project's results are measured, analyse them and share them throughout the organisation. Then spend money on what generates the best return.
- Too much interference. Some CEOs approve a marketing plan, and then insist on constantly making adjustments. Sometimes, the best approach to marketing planning is to wait until marketing efforts can be suitably measured and then fine-tune the marketing plan. Constant meddling only distorts results and demoralises the people in charge of driving the marketing campaign.
For some organisations, maintaining a full-blown marketing department may be too costly and impractical to justify. Another option is to hire a professional marketing consultant to ensure that your product meets customer demands the way it should.
Using a marketing consultant
To get the most out of a marketing consultant, we suggest the following:
- Start with clear goals. Define what you want from your marketing consultant, and don't hold things back. Keep in mind that no one understands your company's culture or history as thoroughly as you do. Offer all the details you can so that the marketing consultant has more to work with.
- Don't leave the marketing consultant dangling. The marketing consultant you appoint is a technical expert; they use specialised tools to solve the marketing problems you know intimately from your day-to-day business dealings. If you take the time to work together, you'll see better results than if the marketing consultant is left trying to work out everything on their own.
3. Marketing strategy
Effective marketing doesn't come naturally to most businesses.
When reaching out to customers, many companies describe what the product is, explain their product better, and then explain to the customer why they should buy it. This is also how most salespeople make sales presentations.
All too often, however, they leave out the part about how the product benefits the customer. But the only time the customer is ever interested is when you tell them how the product will improve their life.
Of course, it's impossible to highlight your product's benefits if you don't know what your customers want. That's where market research comes in.
Using market research
Step one in market research is determining what you genuinely need to find out. Are you considering entering a new market? A new market area? A new product line mix? The kind of information you're after will influence the type of market research you do.
Other key questions for market research:
- What's the current size of the market?
- How fast is the market growing?
- How can we hope to reach the market?
- Can the market be segmented into targeted customer groups?
- What makes our product distinctive in the marketplace?
- What types of people buy our product or service?
- What's most important to buyers when choosing a product (price, quality, delivery time, etc.)?
- What do customers like about our competitors' products that we're not offering?
4. The marketing plan
The best marketing plans always focus on the customer. Therefore, the marketing plan should be organised to address specific questions:
- What does the customer really need?
- Where do they want to buy it?
- How do they want to buy it?
- How much are they willing to pay?
A solid marketing communications strategy is also crucial. Do you know what your target customers read and listen to? What are the best ways to get their attention? This aspect of the marketing plan should address your organisation's promotional goals ("promotions" include everything from advertising to public relations).
Other key questions in marketing planning:
- How can you communicate more about your product's specific benefits?
- How much money are you willing to spend on marketing to get your message across?
- What media would work best to market your specific product?
- How will you evaluate the results of your promotional efforts?
Plan ambitiously but be realistic about your marketing objectives. Consider what you hope to accomplish in terms of what your marketing can realistically achieve. Ask yourself:
- How can we set ourselves apart from our competition? By price? Product benefits? Other attributes?
- Is our ultimate marketing goal improving sales of a specific product or service, or do we want to focus on generating more qualified leads?
- Is customer retention our real marketing objective?
General statements such as "We're committed to getting more business" or "We want to boost sales" are essentially meaningless. Ask questions in order to clarify your goals. Keep working on your answers until you've identified your most important objectives.
5. Customer focus
To think like your customers, your company must encourage a customer-oriented culture. Your decision-making process should include a mechanism for collecting and understanding customer input. Before you design, test and sell your product, make sure you've gathered, interpreted and synthesised all the customer information you can find. That way, you're not making the product in a vacuum, but backed up instead by solid data.
Where does this customer information come from? There are several fundamental sources:
- Customer complaints. Look at complaints your business has received over the past few weeks and months. Does your management team seriously examine what's behind these complaints? Does the management team offer solutions to reduce the number of complaints?
- Customer surveys. This is still considered among the most effective methods for collecting reliable, objective data about your customers.
- Industry trends. Study patterns in your industry. Read trade publications. Monitor new trends and approaches to customer care.
- Face to face contact. Do you know – really know – how your customers buy your products and exactly what they do with them? Nothing beats getting out of the office and meeting with customers directly.
Market research offers crucial information about customers' buying habits, needs, preferences and opinions. There are five basic market research methods used by most businesses:
- Market survey. With a well-designed market survey questionnaire, you can evaluate a sample group that represents your target market. (The greater the sample, the more trustworthy are the results.) One-to-one market surveys – usually conducted in high-traffic areas such as shopping centres – offer an opportunity to distribute samples of your product and gather immediate feedback.
- Focus groups. In this market research format, a trained facilitator uses a scripted series of questions to lead a discussion among a group of selected individuals. These market research sessions are held in a "neutral" location (often at a place with videotaping equipment and an observation room with one-way mirrors).
- Personal interviews. This market research method is more concentrated than market surveys, and while the results aren't statistically reliable, they can yield valuable insights into customer buying habits. They also unearth unexpected concerns that may lead to improvements in customer service or product design and distribution.
- Field trials. With this type of market research, the company places a new product in selected outlets to test customer response under authentic selling conditions. It's a valuable opportunity to modify product or packaging before final roll-out.
The best customer benefit is worth more than all of your product's features combined. Do you know how your product benefits your customers? This should always be the focus for your marketing campaigns.
To keep that goal in sharp focus, we suggest asking these questions:
- How do our customers profit from using our product?
- How much money does it save for our customers?
- How much money can it earn for our customers?
- Does our product have built-in intangible benefits? Is there a way to quantify these intangibles?
Identify the benefits your customers get from your product and then make those the centrepiece of your company's marketing message.
6. The CEO and marketing
A marketing-oriented CEO works hard at intimately understanding the customer's needs. Broadly speaking, these needs fall into three categories:
- How to increase their productivity
- How to reduce the cost of doing business
- How to improve their competitive status.
The CEO is – or should be – the chief marketing officer. He or she should avoid getting stuck in a "product-thing" mentality that asks: "What are our customers buying from us? Why should they buy from us instead of our competition?" Instead, the question should be: "What value or benefits do our products provide?" That's the only question that truly matters.
CEOs should spend a substantial amount of time out in the field, meeting with customers and prospects – not for the purpose of selling, but to better understand their needs, wants and demands. CEOs are uniquely equipped to do this. They know their own business, so they'll likely understand what their business can do to address customers' issues.
Above all, the CEO has the power and influence to ensure that marketing is considered a primary function within the organisation. Don't look at marketing efforts as an expense. Sales are an expense. Marketing is an investment in your company's future. Do everything possible to get the best people involved in marketing activities, and see that this ethic is incorporated into the culture as a whole.
7. Direct marketing
Direct marketing is a system by which a business communicates directly with targeted groups of customers in order to generate a response and/or conduct a transaction. Despite changes in technology affecting virtually all aspects of marketing today, direct marketing remains one of the most measurable and cost-effective ways to sell products and services.
Should your company include direct marketing in its promotional mix? As a guideline, direct marketing can be valuable in the following circumstances.
- Your primary, or significant, method of distributing your product is through the mail or directly to your customers. The key to doing this effectively is acquiring and maintaining an accurate database of targeted customers. The most successful direct marketing businesses make having excellent databases a number one priority.
- Your product offers a variety of benefits. Trying to convey multiple product benefits through a print or electronic medium can result in confusion for your customers. But with direct marketing, a well-composed direct mail letter can communicate all of these benefits and announce special promotions such as discounts or contests.
- Your product is expensive. Again, a direct mail letter offers greater opportunity to expand your product's appeal (and convince potential customers to spend a little extra) than the limited space of advertising.
Email marketing has become an increasingly valuable form of direct mail. Email ads are a great supplement to traditional methods, primarily for three reasons:
- They are, in essence, free.
- They can be changed quickly.
- They aren't confined in shape or length.
Other tips for email marketing include:
- Know whom you're talking to. One way to make your email marketing message stand out from the flood of others is by speaking to your customers in their own language. Through the use of industry buzzwords, you demonstrate that you know who they are, what they need and what you can offer them.
- Include a meaningful offer. Customers are more likely to respond to email marketing when they're offered something free (an industry "white paper", for example, or a free seminar). Other eye-catching offers for email marketing include coupons for discounts, free shipping, and a rewards or points programme.
- Don't overdo it! Because of its ease of use, you could fall prey to sending "exciting" email marketing messages every day or many times a week. That's overload. A cogent, well-designed email marketing message sent once (or, at most, a few times) a month is preferable. And only send it when you have something worthwhile to share.
"Direct response" marketing invites the customer to take action by:
- placing an offer directly in front of the customer
- asking the customer for additional information or to make the decision to buy
- tracking customer response in order to measure the return on your marketing investment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.