Elements of a Marketing Strategy – Part 2

This is the second part of my post on important elements of a marketing strategy In these posts, I would like to share a more general view on marketing, without getting into detail on the tools and strategy implementation.

marketing strategy
Elements of a marketing strategy

Company

One of the most important steps in creating a marketing strategy, in addition to defining the products you offer and your target customers, is defining who you are. In other words, your company identity and how you want to communicate it.

Branding

Remember that your company is a solid part of your brand. Do not neglect corporate identity elements, such as logo, colors, fonts, etc. Once they are set, use them consistently in the marketing and sales materials, as well as internal documentation.

People

This is arguably the most important company asset and should be part of your marketing strategy. This aspect, is, of course, not just limited to PR efforts for senior management. A lot of tech companies employ “product evangelists” to personalize their marketing. Apart from this, sharing personal employee stories, e.g. on social media, may contribute to the positive image of your company and create more trust.

Mission and vision statements

Although they may seem unimportant at first, a well-formulated set of values and a common vision can become a driving force for company development. They can also be the “glue” that holds different people together.

Although it may sound ironical, it is equally important to define who you are not. Trying to serve more customer segments and flexibly adapting your company image accordingly will confuse your customers. In the worst case, they will start distrusting you.

Competitors

Someone once said that companies should stop concentrating on beating the competitors and instead focus on delivering value to their customers. Although I share the same view, this doesn’t mean that you must disregard the competition.

Learning from competitors

Learning from competitors has two sides to it. On the one hand, you can benchmark the strategy of your more experienced /successful competitors. On the other hand, you can also learn from their mistakes. Take a critical look at:

  • Structure and design of their websites
  • User journey on the website
  • Selection of social media channels and shared content
  • SEO strategy (backlinks opportunities, keywords, etc.)
  • Content types used for content marketing

Direct and indirect competition

In order to understand who your competitors are, you can think in terms of competition levels (e.g. a model by Lehman & Winter).

You probably concentrate on your direct competitors (product form competition), however, try to think of competition in a wider sense. Product category competition includes similar products that can differ in functionality or design. Generic competition is the next competition level that includes products that can be used as substitutes but do not offer the same features or benefits. Budget competition comes from products allocated to the same part of consumer budget (e.g. “entertainment”, “housing”, “education”).

competition levels marketing
Marketing Competition Levels (Lehman & Winter)

Marketing tools

I put marketing tools at the end of this list on purpose. If a company lacks experience in marketing, they tend to concentrate on the tools too much. It is not uncommon that they ask such questions as: “Shall we use Google AdWords?”, “What do we write in our blog?” before they defined who they are, what products they offer and who their target customers are. (I talked about this in one of my older blog posts on mistakes in marketing).

One well-known model for marketing decisions is 4 P’s by McCarthy (Product, Place, Price, Promotion). If we adjust this model to online marketing, the promotion will include:

  • Advertising (Google AdWords, display, etc.)
  • PR (Social Media, blogs, guest articles, etc.)
  • Direct selling (e-mail marketing)
  • Promotion (e-coupons, free trial, etc.)

You also need to make decisions on how to position your product, what pricing strategy you will choose and what your sales channels will be.

All in all, when crafting your marketing strategy, you need to go through several distinct steps and plan carefully. Also, remember that once the strategy is selected, you need to follow it consistently. Making too many changes and adjustments along the way will inevitably result in time and budgetary losses.

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Elements of a Marketing Strategy – Part 1

marketing strategy

The diagram above demonstrates elements of a marketing strategy. Below, I will explain it in more detail.

Product or service

Although it may sound strange, the first obstacle in creating a marketing strategy is to define what product or service you are going to sell. Sometimes companies are too quick to change or switch their product because they try to please the end customer. This can cause contradicting marketing messages and result in marketing campaigns being ineffective.

USP (Unique Selling Proposition)

USP is the unique benefit resulting from the product or service that makes it stand along against competition. What is that that you can do better than others? For example, the USP of Ryanair is low-cost flights.

Features

Features are what your product or service is comprised of. In order to sell a product, it is not necessary and sometimes even counterproductive to include a large number of features. Rather, the features should match the requirements of the target customer (see below).

Use cases

Writing use cases for your product or service is an excellent exercise that helps you to get ideas for promotion. Here are some examples of use cases for an app for sending appreciation badges within a company:

  • New colleagues can introduce themselves by sending short messages to the team members.
  • Colleagues can congratulate each other on a completed project or on other occasions by sending a badge.
  • The app can be used after meetings or training for sending feedback and thanking the organizer.

Target group

Achieving product-to-market fit is one of the cornerstones of successful marketing. However, not only the product part is important but also defining and selecting your target group.

Segmentation

You can segment both outside and inside your target group. Segmenting the market in general (see market segmentation) orientates you what segments you will target and what not. Once you selected your target group, you will unlikely be homogeneous, so you need to segment further. Typical target group segmentation for a B2B product can include such criteria as:

  • Users vs decision makers
  • Company size
  • State-owned vs privately-owned companies
  • Geographical segmentation (country, location)
  • Field of business

Personas

Personas help you to define in detail who your customers are, to understand what language they speak, what motivates them and drives their decisions. Customer personas are more detailed and granular than segments and may look like this: “Male customers, located in the US, aged 20-30, working as software developers, interested in hacking, having “geek” mentality. Their main focus is not on the career but on improving their skills. They visit hacker blogs and websites, spend a lot of time online and participate in forums and closed communities. Their challenge at work is time pressure, the necessity to learn new skills fast and requirements changes in the course of projects.”

Market

While the target group defines who your customers are, market defines how many there are of them and also how many you can realistically reach.

Size

No matter how good your product fits customer needs or how elaborate your marketing strategy is, without a proper market size your product is not going to scale. Market size can be defined in several ways, e.g. total potential market size (the total number of potential users for your product), total existing market (what share of market is already being covered by the competition), the size of the market you can serve (for example, if your product does not scale very well or because there are strong competitors in the market). Estimating market size will be based both on research and assumption, however, this is an important step in creating marketing concept.

Market segmentation

Here you can look at the existing market (competition, customers) or make assumptions about a market you can create. Creating a new market means that you have to generate the demand by educating potential users about your product or service instead of fighting the competition. Bear in mind that this approach has both advantages and disadvantages: you will not have direct competitors, but at the same time, you may face indirect competition by substitute products (see Part 2 of this post).  It also takes a lot of time and effort to explain to potential customers why they need your product or service, so your sales materials and pitches have to be carefully crafted.

In the second part of this post, I will explain how company image influences your marketing concept, what you can learn from your competitors and why marketing tools are the final step in crafting your marketing strategy.

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Recap: Meetup Agile Work on May 16

This is a recap of the Meetup Event “Agile Work meets Software Development”, which took place at tarent solutions in Bonn on May 16, 2019.

This is a recap of the Meetup Event “Agile Work meets Software Development”, which took place at tarent solutions in Bonn on May 16, 2019.

The event was divided into two tracks (Agile Work and Software Development), each of them consisting of three sessions running in parallel. A video about this event can be found here:

 

I attended the sessions on agile working. The first talk was called “Agile Leadership” and was given by Dr. Stefan Barth (tarent solutions). I found the talk to be very insightful, it also contained many real-life examples. According  to the speaker, in order to work in agile way, a paradigm shift should take place at management level. Managers should be willing to co-work and share responsibility with their teams instead of commanding and delegating. Most importantly, they should be willing to admit their mistakes but also to accept that their subordinates can make mistakes as part of the learning process.

The second session was prepared by Corinna Voß (tarent solutions) and was about starting innovative projects using effectuation technique. I personally found this technique very well applicable in personal life, outside business projects. You can learn more about this technique on the website https://www.effectuation.org/.

Here I will briefly describe some elements of effectuation. The first one is bird in hand principle (it was called “refrigerator” principle in the talk). It states that an entrepreneur should plan with what is already there at the start of a project (such as available knowledge, immediately reachable contacts and financial means at hand). He/she should take one small step at a time instead of trying to “start big” and collect means to cover the whole project beforehand. Crazy quilt principle means that a project starter partners with people who show immediate interest into the project thus obtaining their commitment and reducing uncertainty. Lemonade principle means that an entrepreneur should see any unexpected changes in the course of the project as chances to re-orientate and maybe start something new and more promising. With affordable loss principle, one calculates from the start what resources (either time or financial) they will be willing to lose in case the project fails.

The last talk (by Moritz Vieth (ip.labs) und Martin Pelzer (tarent solutions)) was about working with people in agile environments and included some successful practices.  For example, employees can get a day a month to work on something “meaningful”, possibly not connected to their current projects (e.g. learning a new skill, attending a seminar or working on a personal project). Another example was placing an idea whiteboard in the kitchen (the collected ideas are voted on and the top ones are implemented by the company). Some companies also run a buddy program for their employees (in addition to matrix and line manager, employees get a “people manager” who acts as a councilor case of any questions or problems).

In summary, the talks provided a lot of insights into the world of agile work and what challenges and opportunities one may face.

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