05 Apr Marketing Success
Insightful Business Analysis + Effective Execution
Trying to sell a product or service without a well thought out marketing plan is like throwing something at the wall and hoping it sticks. This has one advantage and two disadvantages. The advantage is it is easy to do and does not require much effort. Disadvantages are that it is inefficient and you don’t learn much of anything. If something happened to just work by chance, it may never happen again.
Marketers commonly confuse marketing strategy with a marketing plan. Marketing strategy is the “what.” What are you trying to achieve, what are your goals? Marketing plan is “how” you are going to achieve those goals. It is the sequence of events that will coherently move the ball forward.
Before getting into the nuts and bolts of how to reach your customers, you have to gather some business intelligence first and study the marketplace in relation to your offering. It involves several steps:
- Situation Analysis: First you need to study the landscape you will operate in. You need to do an in-depth situation analysis which usually takes the form of a SWOTT (strengths, weaknesses, opportunities, threats, and trends) analysis. Notice the analysis has two Ts. This is not a typo. Trends are a vital determinant of your success or failure. One has to look at trends, e.g., aging population, automation, artificial intelligence, social media etc. and see where things are moving and make adjustments accordingly. One mistake many make is not realizing that strengths and weaknesses are internally focused. What do you do well (e.g., you have an exceptionally talented team, have a superior technology, or you have a low turnover rate), and what you don’t do well (not good flow of information due to silos, an inexperienced workforce, or lack of defined processes). Opportunities, threats, and trend are externally focused. This is the environment you find yourself in. You did not do anything to deserve the opportunities in front of you or predicaments you find yourself in due to prevailing threats. Trends are how things are changing, e.g., the population is aging.
- Develop proper marketing mix is built around the 4 P’s of marketing: Price, Product, Promotion, and Place. The important thing here is not to just look inwardly but at the competitive landscape. One cannot just say on a whim that I would like to charge $50 for my product to make an acceptable level of profit. You have to look at what competitive products cost and what the market will bear. If there is another product on the market which costs $40 but is essentially similar in features and quality with no disadvantages in terms of marketing strategy or brand equity, it would put you out of business.
- Positioning Strategy: Positioning statement is sometimes obvious because it is the reason you created a product or service in the first place and the reason you are in business. For example, scientists researched and developed Celebrex because it became the first NSAID to be just a Cox-2 inhibitor which helps to relieve pain but spares the stomach lining. Previous NSAIDs inhibit both Cox-1 and Cox-2, so they have a side effect of irritating stomach in addition to relieving pain.
- Target Audience: This requires research and critical thinking. You need to segment the market. As an example, some people ride a bike to exercise, some ride it to protect the environment, while others may want to be the next Miguel Indurain. You have to figure out who is your target audience. If you want to sell to everybody, you will probably not sell to anybody. Defining a target audience requires both demographic (age, income, gender etc.,) and psychographic (attitudes, lifestyles, interests etc.) profiles.
- Financials like break-even analysis and P&L statements will keep you focused.
Four Steps of a Marketing Plan:
Marketing plan is more tactical. The question you ask is, how are you going to reach your customers, convince them to buy your product, and then retain them? If they become advocates of your product, that is cherry on the top.
- Make adjustments to the marketing strategy, if needed. Many things can happen to disrupt equilibrium. New regulations, new competitors, or technological advances will and should impact your marketing plan, if not the marketing strategy itself.
- Develop SMART goals which are specific, measurable, achievable, relevant, and time-limited. I have also seen ‘A’ for aligned and ‘R’ for realistic. It is just semantics.
- Marketing tactics based on budget constraints: This is the nuts and bolts of your marketing program which specifies how you will reach your target audience who were identified in the previous exercise utilizing allotted resources. It is likely you would have to make some difficult decisions on what you can and cannot do based on the dollars you have available. It is generally better to reach your audience through multiple channels, e.g., social media, websites, e-mails, radio etc. than spending bulk of the budget on a single channel. Multi-channel campaigns received a 14% response rate versus 10.2% for single-channel. That is a 37% increase in response rate. An average adult connects to the internet with 4.5 devices and attempting to reach customers with only one channel or device loses many potential touchpoints. However, it is crucial to provide similar customer experience across all channels to reinforce your brand. Develop a media plan for the year specifying what specific tactics will be implemented in which month. As an example, you would want to have information about heart health in February because it is the Heart Health month. It is good to know what type of messages would your prospects be receptive to and what channels would be most appropriate. Traditionally tactics have revolved around outbound marketing using ads, billboards, radio, TV etc. However, evidence suggests that these methods are becoming less effective. Therefore, these efforts should be supplemented by, and in many cases should be secondary to, inbound marketing. With inbound marketing, your customers find you after seeing your content on a blog, social media, search engine optimization etc. For example, a marketing manager at a hospital might share tips on how to avoid getting sick during the flu season or healthy eating habits. The idea is to engage your audience and bring them to your website. If they think you are providing them valuable information to solve their problems or live better, they will remember you when they want to buy a product you sell. According to Demand Metric, content marketing generates 3x more leads than traditional marketing and costs 62% less to attract leads.
- Measure Impact: Determining ROI is most difficult for marketers. John Wanamaker famously said, “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.” About a century later, unfortunately, it is still true. The problem is when four types of promotions are going on at the same time, how does one tell which one is working. Most marketers use instincts but I think it is overrated. The best answer is collecting lots of data on sales and expenses when certain programs were being instituted and then do Market Mix Modeling using Multi-Linear Regression. That’s a topic for another day.
Developing marketing strategy and a marketing plan is a cumbersome but necessary exercise. It is critical for successful commercialization of your products or services.